How Charity could help spread Innovation

Every once in a while innovations come along that offer profitable opportunities for the inventors and business minds that turn them into innovations, but offer even greater possibilities for humanity if widely adopted. I read an article in Fast Company recently that struck me as one of those opportunities. It profiles a mechanic name Jonathan Goodwin and his fuel efficiency exploits.

Traditionally, a potentially market transforming technology will use a skimming price strategy and come into the marketplace priced high and gradually reach lower price points as volume builds and development costs are recouped. This is fine with something like the iPhone or high definition television, but it strikes me that on the other hand there is a loss to society with this price strategy with certain innovations. This includes things like life-saving drugs (AIDS, Cancer, etc.), but also other technologies like Mr. Goodwin’s innovation in internal combustion engine design. The article mentions a $5,000 device he co-developed that sells through SAE Energy that can, in general, yield a 100% increase in fuel economy while simultaneously producing 80% fewer emissions.

In general, Mr. Goodwin’s engineering feats can double and possibly quadruple the fuel efficiency of vehicles by replacing their gasoline engine with a high efficiency diesel engines, introducing hydrogen into the combustion process, and marrying the engine to a hybrid propulsion system using regenerative braking and batteries. Many examples are given in the article, from creating a 18mpg H1 Hummer (it used to get 9mpg) to a 100mpg Lincoln Continental.

Obviously if X number of people spend the $5,000 for the diesel engine modification and get their payback in one to two years, that is a great benefit to society. But, if a charity like the Sierra Club or even Bill Gates bought the rights to this innovation and worked with an overseas manufacturer to drive the costs of production lower and produced then in mass quantities at a sustaining profit instead of an enriching profit, how low could they be sold for? $3,000? $500? $100?

Social capitalism is an incredibly powerful opportunity for right-minded charities. If a charity did grab onto this and focused on cutting production costs as a way to increase access instead of increasing profits, they could still profitably produce the technology (providing resources to sustain the effort and possibly to fund other efforts) and their success would increase the pressure on the Big Three to take action and possibly could open up a licensing revenue stream if the technology was incorporated into new vehicles as well.

The public relations for a charity taking on such a challenge and approach would be substantial. In addition to delivering on their mission in a tangible way, donations to a charity engineering such a feat would skyrocket. This is a man on the moon kind of opportunity for a charity or philanthropist. Who has the vision and the gusto to grab this bull by the horns and drive it forward?

In the United States, diesel engines predominantly reside in trucks and buses, not automobiles. The article mentions that his company, SAE Energy, is in negotiations with DHL on an 800-vehicle dual-fuel conversion that could get them a 70-cent a gallon offset and reduce their fuel costs by 50%. If we as a society were to take that a step further, what would the impact on society be if instead Mr. Goodwin was recruited to help convert all buses (and possibly trucks) via conversion subsidies to be paid for with an increase in the national gas tax (no matter how big)?

Really, it would be in the interests of national security to do such a thing. There would also be a secondary benefit of such a strategy – public transit ridership would increase as a result of the gas tax increase and fuel consumption would decrease (along with the number of cars on the road). Our nation would be much more secure if we cut our fuel consumption for transportation in half, especially if at the same time the percentage being supplied by home grown Biodiesel and Ethanol went up. And if we get reductions in emissions at the same time? What are we waiting for?

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